Psychedelics Business Ethics Coming Into a Brighter Spotlight

Leading psychedelics advocacy groups are tasked with goals of demonstrating and influencing the way that the psychedelics business operates. 

They create conferences, organize wellness seminars, provide teaching and training courses as a way of not only introducing psychedelics to people who may not have heard about their natural healing power but to outline principles and methods of collaboration. 

Some look at the work of advocacy groups as stepping stones to the broader goal of psychedelics reform, complete with a solid ethics framework.

But for all the good that these advocacy groups are doing, there have been bumps in the road along the way when it comes to the products and therapies that the industry is producing—products that are predicted to create a multi-billion industry, with already millions being invested in development. 

But it’s a slow process to bring a drug to market. Any pharmaceutical designed for humans takes years of research and millions of dollars in expenses. This is especially true of any drugs targeting the central nervous system. They are not a slam-dunk kind of business. They are more of a wait-and-see deal while investors hope for the payoff.

With so much at stake, there was a fear that new psychedelic product discoveries, new methods of synthesizing such substances as psilocybin, could get locked up within a company’s intellectual property vaults, effectively slowing down or blocking innovations by other companies that are, after all, part of a bigger mission of psychedelics: treating human mental health conditions with novel drug therapies.

There should be a stopgap of some sort when confronted with this goal of making something for the greater good. There needs to be guardrails on how the industry develops.

Indeed, one of the earliest and well-known advocacy groups, Multidisciplinary Association for Psychedelic Studies (MAPS), was and continues to be focused on that greater good goal through its outreach work and its wholly-owned subsidiary, MAPS Public Benefit Corporation (MAPS PBC). MAPS PBC does psychedelic drug development, therapist training programs, and sales of prescription psychedelics “prioritizing public benefit above profit.”

But as the nascent industry continues to find its footing, one company, Compass Pathways (NASDAQ: CMPS), found that the temptation to become a lead player in the multi-billion-dollar psychedelics industry created a red alert for industry activists and advocates who believed they were witnessing a monopoly being formed.

London-based Compass Pathways was started as a non-profit in 2015 by co-founders George Goldsmith (now also chairman and CEO) and Ekaterina Malievskaia (now also chief innovation officer) to assist with psilocybin therapy based on “painful effects of depression within their own family,” according to their website. A fair enough incentive to start a non-profit. 

Then on June 13, 2016, Compass became a for-profit company, with a co-founder, president and chief business officer, Lars Wilde, and financing from PayPal co-founder and billionaire Peter Thiel who helped guide the company to their IPO on NASDAQ in September, 18, 2020—the first psychedelics company to be listed on NASDAQ. 

MAPS congratulated Compass on their IPO, and noted that they had built their company “upon the innovative work of non-profit organizations including the Heffter Research Institute, Usona Institute, the Beckley Foundation, and MAPS.”

Then, in April, 2021, Compass did the unthinkable: they filed an international patent application for psilocybin. The company claims the patent is just for their formulation of synthetic psilocybin. But patent lawyers who reviewed the document say that it reads as broadly asserting a patent on any sort of psilocybin administration.

Now their patent has been challenged by the non-profit group Freedom to Operate with a filing on December 15, 2021, requesting a post-grant review (a post grant review is a trial proceeding to review the patentability of one or more claims in a patent). The review process could take up to 18 months. It’s a case being carefully watched by the industry.

As the psychedelics industry continues evolving, and dealing with the growing pains that any nascent industry experiences, industry leaders know that they need to assert and protect the ethical cause of what they are doing and continue to remind each other about the help their work means for people suffering from mental health problems like treatment-resistant depression. Advocacy groups drive and sustain that cause.

One example of the industry getting on the same page: In December 2017, just a few months after Compass decided to change to a for-profit company, a number of non-profit company leaders, along with dozens of scientists, scholars, practitioners, and philanthropic organizations, signed a statement committing to various principles of research and therapy work in psychedelics. The statement, led by Robert Jesse, a psychedelics researcher, was developed “in response to concerns that, as psilocybin and MDMA progress through clinical trials showing promise as medicines, commercial enterprises will form in ways that incentivize them to not share materials or knowledge, to prioritize profits, or to act competitively against others.”

The statement reads, in part, that signatories to the statement will “place the common good above private gain” and will “strive to place our discoveries into the public domain, for the benefit of all.”

Maybe this psychedelics industry declaration of intent will become the document on which psychedelics companies will build their businesses. Maybe it will get dismissed as just wishful thinking by those who don’t fully grasp the concept of capitalism. But at least it’s a good start for an agreed-upon ethical base that this industry needs going forward into what promises to be a very busy year for the psychedelics industry.

Dave Hodes

David Hodes is a business journalist based in the Washington D.C. metropolitan area. He has contributed feature articles to several cannabis and psychedelics publications, as well as general business/lifestyle publications, on a variety of topics. Hodes was selected as 2018 Journalist of the Year by Americans for Safe Access. He is a member of the National Press Club, and the deputy booking agent for the National Press Club Headliners Committee.

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